Italy is set to propose a 2027 budget plan that includes an additional deficit of around €7 billion, deviating from its previously agreed target with the European Union. This move is driven by the need for increased spending on defence and energy, according to Deputy Prime Minister and Foreign Minister Antonio Tajani. The government intends to seek greater fiscal flexibility from the EU to support these priorities.
Economy Minister Giancarlo Giorgetti stated that Italy would request the maximum flexibility allowed under EU rules. This includes an allocation of 0.6% of GDP for energy security and 0.9% for defence spending. The Italian government argues that the rising costs of energy and heightened defence needs justify the need for additional fiscal room.
Prime Minister Giorgia Meloni has appealed to the European Commission for increased budgetary flexibility, citing the challenges posed by rising inflation. The European Commission, however, has indicated that EU member states already have some leeway under the bloc’s existing fiscal framework.
Italy will need to submit its spending proposals to Brussels for approval before proceeding with the plan to increase its deficit. The government’s proposal reflects its strategy to balance national priorities with EU fiscal requirements amid economic pressures.